Abstract:

This study questiones the relationship between inflation and economic growth for the OECD countries. To reveal this relationship, data between 1996 and 2016 are analyzed using panel marginal value regression methods. The findings of the study are that the relationship between inflation and economic growth is not linear. Inflation margin is estimated at 3,6207 per cent for OECD countries. While the inflation rate is below this value, the impact of inflation on economic growth is positive but statistically meaningless while the inflation rate is above this value, it has disruptive effects on growth. These findings are expected to assist policy makers in the implementation of monetary policy, especially in countries implementing the inflation targeting regime.